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There's a nother Web 2.0 Conference coming up, and Tim O'Reilly has posted What Is Web 2.0? : Design Patterns and Business Models for the Next Generation of Software. Dare Obasanjo has managed to simplify this criteria to The Web 2.0 Litmus Test:

So let's review. Tim O'Reilly's essay can be reduced to the following litmus test for whether an offering is Web 2.0 or not

• Exposes Web services that can be accessed on any device or platform by any developer or user. RSS feeds, RESTful APIs and SOAP APIs are all examples of Web services.
• Harnesses the collective intelligence knowledge of its user base to benefit users
• Leverages the long tail through customer self-service